Will health law increase my insurance tab?
Some may pay more, some may pay less -- it depends on who you are, where you live
There are many assumptions about what the effects of the health care law will be. This series aims to separate myths from realities and answer questions surrounding the Affordable Care Act.
Myth: My health insurance premiums will increase under the ACA.
Reality: Some people may pay more, and some people may pay less. It really depends on who you are and where you live.
For those buying their own insurance, we won't know the full array of premium prices until the state-based insurance exchanges open for enrollment on Oct. 1.
But here's what's clear:
People who currently pay little for a bare bones policy with a very high deductible will likely see their monthly insurance tab rise. Young men, who often pay little for insurance since they rarely go to the doctor, will also likely see a bump in their premiums.
But many older Americans will probably end up paying less. That's because the health care law mandates that older enrollees can't pay more than three times the amount of younger participants. Nowadays, it's typical for them to pay five times more than younger members.
People with chronic conditions are also paying through the roof today, if they can even get coverage at all. Their rates will go down because younger, healthier residents will enter the risk pool. And lower-income Americans will be entitled to federal subsidies that could greatly lower their monthly burden.
Where you live will also have an impact on rates. In New York, for instance, average premiums for 2014 will fall by half since the state already requires many of the the ACA provisions, which keeps insurance pricey in the Empire State today.
But in lightly-regulated states, such as Ohio and Florida, premiums will likely soar since insurers there will no longer be able to exclude the sick and will have to offer more comprehensive policies.
According to data released Wednesday by the Obama administration, premiums will cost less than predicted. The national average premium for the benchmark plan will be $328 before subsidies, 16 percent less than projected by the Congressional Budget Office. The benchmark is the second-lowest cost "silver" policy for 48 states, upon which federal subsidies are based.
Still, few insurers have revealed their full selection of plans and prices. So CNNMoney took a look at the plans provided by one insurer, Physicians Health Plan of Northern Indiana, to give consumers a better idea of how things will change.
Our analysis found that 21-year-old men will pay a lot more for an exchange plan, but 42-year-old women and 62-year-old men will shell out less for a silver-level plan that comes with a $2,500 deductible and a roughly $25 co-pay for office visits.
Under this scenario, a young man's monthly rate will rise to $214 on the exchange next year, up 63 percent from today. The woman, however, will pay $284, a drop of more than 7 percent, while the older man will be charged $615, a nearly 6 percent decrease. This is because the ACA requires that women pay the same amount as men and limits rate hikes on older participants.
A recent Kaiser Family Foundation report of 18 state exchanges found that premiums were running lower than the Congressional Budget Office had predicted. But since there's a wide variation of what people pay for individual insurance today, it's hard to know how the health law will affect you until you sign up.
It's a little more complicated if you get your insurance through your job. The law doesn't actually call for any changes to existing employer-based plans for 2014. But some big companies are choosing to make changes to their plans as a result of increasing costs under the health law, such as extra taxes and fees. Some are dropping coverage for spouses who can get insurance elsewhere. Others are funneling part-timers to the exchanges.
As for employee premiums, the ACA is not having a direct effect right now. Employees are contributing nearly 6 percent more for health insurance for their families in 2013, according to the annual survey conducted by the Kaiser Family Foundation and the Health Research & Educational Trust. But the rate of growth has actually been slowing in recent years.
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